Macroeconomics
11th Edition
ISBN: 9781260506891
Author: Colander
Publisher: MCG
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Question
Chapter 5, Problem 9QE
To determine
Impact of rent controls.
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Students have asked these similar questions
How would an increase in the demand for housing affect the market for construction workers?
The demand for construction workers would increase, causing construction workers' wages to rise.
The demand for construction workers would increase, causing construction workers' wages to fall.
The demand for construction workers would decrease, causing construction workers' wages to rise.
The demand for construction workers would decrease, causing construction workers' wages to fall.
A city's state cabinet has agreed on a rent freeze for five years to counter rising housing costs in the city. Only housing built since 2014 and some social housing will be exempt from the freeze. Discuss the effect of this policy on the quality and quantity of housing, on landlords and tenants, and on other markets.
As you can see from the article in the prior problem, "Rents Hit All-Time Highs amid Job Growth and Low Vacancy Rates," some people
move out as a result of rent increases, while others are ready to pay an even higher rent. Rent control adds yet another aspect by
setting a ceiling on what the rental price can ultimately rise to. The supply and demand model can be used to illustrate the mechanism
that leads to all these different market outcomes.
Consider the market for rental properties in Los Angeles and Orange counties in Southern California. Suppose that while average
earnings increased by about 10% in Los Angeles and Orange counties, the average rent has increased by 20%. (Assume for a moment
that there are no rent control regulations.)
Adjust the following graph to illustrate the rent increase by either using the black point (cross symbol) or by shifting the supply and demand curves.
The Market for Rental Properties in Los Angeles and Orange Counties
4000
3600
Supply
Demand
3200…
Chapter 5 Solutions
Macroeconomics
Ch. 5.1 - Prob. 1QCh. 5.1 - Prob. 2QCh. 5.1 - Prob. 3QCh. 5.1 - Prob. 4QCh. 5.1 - Prob. 5QCh. 5.1 - Prob. 6QCh. 5.1 - Prob. 7QCh. 5.1 - Prob. 8QCh. 5.1 - Prob. 9QCh. 5.1 - Prob. 10Q
Ch. 5.A - Prob. 1QECh. 5.A - Prob. 2QECh. 5.A - Prob. 3QECh. 5.A - Prob. 4QECh. 5.A - Prob. 5QECh. 5.A - Prob. 6QECh. 5.A - Prob. 7QECh. 5.A - Prob. 8QECh. 5.A - Prob. 9QECh. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - Prob. 3QECh. 5 - Prob. 4QECh. 5 - Prob. 5QECh. 5 - Prob. 6QECh. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QECh. 5 - Prob. 11QECh. 5 - Prob. 12QECh. 5 - Prob. 13QECh. 5 - Prob. 14QECh. 5 - Prob. 15QECh. 5 - Prob. 16QECh. 5 - Prob. 17QECh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 1IPCh. 5 - Prob. 2IPCh. 5 - Prob. 3IPCh. 5 - Prob. 4IPCh. 5 - Prob. 5IPCh. 5 - Prob. 6IPCh. 5 - Prob. 7IPCh. 5 - Prob. 8IPCh. 5 - Prob. 9IPCh. 5 - Prob. 10IPCh. 5 - Prob. 11IPCh. 5 - Prob. 12IPCh. 5 - Prob. 13IPCh. 5 - Prob. 14IP
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